Export companies set for early boost from resumption of Saudi-Qatari trade

Export companies set for early boost from resumption of Saudi-Qatari trade
A man walks past the headquarters of Saudi Basic Industries Corp. (SABIC) in Riyadh, October 27, 2013. (Reuters)
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Updated 07 January 2021

Export companies set for early boost from resumption of Saudi-Qatari trade

Export companies set for early boost from resumption of Saudi-Qatari trade
  • Aviation, construction, food companies to see biggest short-term benefits: Business experts
  • Key Saudi gainers will be the likes of Saudia Dairy and Foodstuff Co. (SADAFCO) and Saudi Basic Industries Corp. (SABIC)

RIYADH: The normalization of Saudi-Qatari diplomatic and trade relations will have benefits for both countries, especially for the aviation industry and Saudi export-focused sectors, business experts claim.

Dr. Saleh Al-Sultan, a writer and former chief economist at the Ministry of Finance, told Arab News: “The Gulf cooperation was undermined in the previous few years but the relations between Saudi Arabia and other Gulf states and Qatar are back to normal now, which means the ties between all states will be stronger than ever.

“Before the boycott, Saudi Arabia and Qatar had many mutual economic activities but collaboration stopped. We hope that the relations return to normalcy and ties become deeper and stronger. Besides, increasing the volume of economic exchange and transactions will bring positive results to Gulf states,” he said.

Abdulrahman Al-Otaishan, chairman of the Saudi-Bahraini Business Council and former chairman of the Saudi-Qatari Business Council, pointed out the importance of economic integration between all Gulf states and said that over the past four decades the Gulf Cooperation Council (GCC) had played a pivotal role in the region.

“The easy movement of Gulf nationals from one state to another and the facilitation of money movement have brought about a lot of benefits to all states.

“Saudi Arabia might have the largest impact and weight because of its geographical, historical, religious, and economic importance. Gulf states share many things in common.

“The current summit comes at an exceptional time in light of the coronavirus disease (COVID-19) pandemic. It’s important to end all differences,” he added.

Al-Otaishan noted the importance of bilateral relations and the land route connecting Saudi Arabia and Qatar and said that any disruption would have a negative impact on trade between both countries. He highlighted the Saudi companies that had contributed to Qatari projects and the quality of their produce.

Some of the key Saudi gainers will be the likes of Saudia Dairy and Foodstuff Co. (SADAFCO), mining and metals company Al-Samaani Factory for Metal Industries Co., and Saudi Basic Industries Corp. (SABIC), the world’s fourth-largest petrochemicals firm, all of whom are likely to benefit from the reopening of the border with Qatar.

Mazen Al-Sudairi, head of research at Riyadh-based financial services company Al Rajhi Capital, told Arab News: “It is positive but not material. It would be beneficial for export-oriented companies in the construction space and probably some companies such as Almarai. However, this is already priced in and hence not much of a surprise.”

According to research by Saudi financial news portal Argaam, Riyadh-based diary firm Almarai will benefit as it lost 5 percent of its sales when the Qatar border shut. Similarly, SADAFCO lost 3 percent of its annual sales when the dispute began in June 2017.

Riyadh’s Saudi Vitrified Clay Pipe Co. (SVCP) saw a drop in its sales when the borders shut and trading analysis by Argaam showed it was likely to be another winner as a result of the resolution of tensions between Doha and its neighbors.

In Qatar, one of the main benefactors will be Qatar National Bank. The GCC’s biggest bank, the Qatari lender had opened a branch in Riyadh in May 2017, just a month before the Kingdom broke off diplomatic ties with Qatar.

An obvious benefactor of the opening up of airspace will undoubtedly be state-owned national carrier Qatar Airways.

Joice Mathew, senior research manager at United Securities, told Reuters: “We should see significant cost saving for some Qatari companies on the fuel and logistics side.

“With a full removal of the blockade, Qatar Airways stands to benefit significantly on fuel cost, which would help them in offering competitive prices to travelers.”

The aviation benefits will also be felt on the Saudi side, as the Kingdom’s carriers begin to restart international flights.

“Qatar Airways and Saudi Arabian carriers like Saudia, flynas, and flyadeal will be able to resume operations, even on a limited basis, with a bigger network and by extension, a bigger avenue to more revenue,” Saj Ahmad, a London-based aviation analyst at StrategicAero Research, told Arab News.

However, Ahmad said the full benefits for the region’s airlines would take time to materialize and that there was “no boon on the horizon any time soon. That won’t emerge until such time a significant portion of the globe is immunized with the COVID-19 vaccines.”

Hong Kong-based Krisjanis Krustins, director of sovereign ratings at Fitch Ratings, said the normalization of economic and trade relations would “help Qatar’s battered non-oil economy.” But he warned that Doha’s high public-sector debt would remain a drag on the country’s AA minus/stable sovereign rating.

Krustins predicted Doha’s government debt-to-GDP ratio would hit 76 percent, up from 60 percent in 2017 when the dispute began, but was optimistic that the latest news would help it to balance its books.

“Qatar will post a roughly balanced budget in 2020. The 2021 budget plans for a deficit of 6 percent of GDP excluding investment income, at an oil price of $40 per barrel. We see this as broadly realistic,” he added.

Sports fans will also be rejoicing at the news, with the Qatar FIFA World Cup set to be staged in the country in 2022.

Alexander Perjessy, senior analyst at Moody’s, told Reuters that the international football tournament “would unlikely be a resoundingly successful event if the regional football fans, especially from the most populous Saudi Arabia, were unable to attend.”


UAE to build waste-to-energy plants to burn two thirds of trash

UAE to build waste-to-energy plants to burn two thirds of trash
Updated 30 July 2021

UAE to build waste-to-energy plants to burn two thirds of trash

UAE to build waste-to-energy plants to burn two thirds of trash
  • Dubai is building a $1.1 billion waste-to-energy plant
  • Sharjah, Abu Dhabi also constructing facilities

RIYADH: The UAE plans to build a series of waste incinerators that will eventually burn up to two thirds of the country’s trash to deal with a growing refuse problem.

Dubai is constructing a $1.1 billion waste-to-energy facility, one of the largest in the world, while a smaller plant in being built in Sharjah and will begin operation this year, Bloomberg reported. Two further projects are being built in Abu Dhabi.

Burning trash creates carbon emissions, potentially making it harder for the UAE to reach its target of becoming carbon neutral by 2050.

However, Bee’ah, Sharjah’s waste company, will try to mitigate this by creating green spaces, install a 120-MW solar array on top of the plant and produce hydrogen from the garbage to fuel its rubbish trucks. Sharjah will also be able to close its landfill site.

Bee’ah CEO Khaled Al Huraimel said he wants to export the model across the region, including Saudi Arabia.

While environmentalist favor recycling over burning of trash, turning plastics and other waste into usable products is extremely challenging.

China’s recent ban on the importation of waste “has really changed the economic drivers,” said Mr.John Ord, a UK business director at engineering firm Stantec. “All of a sudden, we have a lot of waste that needs to be dealt with.”


Bitcoin tests the $40k resistance level

Bitcoin tests the $40k resistance level
Updated 30 July 2021

Bitcoin tests the $40k resistance level

Bitcoin tests the $40k resistance level

RIYADH: Bitcoin traded higher on Thursday, rising by 0.03 percent to $39,670.54 at 4:02 p.m. Riyadh time. Ether, the second-most traded global cryptocurrency, was up 0.44 percent to $2,291.72.05, according to data from CoinDesk.

Below is the latest news from the world of cryptocurrency:

Bitcoin buyers have been profitable, as the cryptocurrency tests the $40,000 resistance level. Sentiment has improved significantly over the past week, although some analysts believe it is time to pause before rallying again.

In a CoinDesk report, Justin Chuh, a senior trader at Wave Financial, said: “Bitcoin easily broke through $35,000, but I think it will probably have a harder time going through $40,000 this time.”

But attitudes could easily shift from bullish to bearish as bitcoin was still in a consolidation phase with strong resistance, the report added.

HIGHLIGHT

Bitcoin buyers have been profitable, as the cryptocurrency tests the $40,000 resistance level. Sentiment has improved significantly over the past week, although some analysts believe it is time to pause before rallying again.

Meanwhile, in a research paper published on Wednesday, Bank of America described central bank digital currencies as a more efficient payment system than cash. The second-largest bank in the US by total assets, said that digital central bank currencies could completely replace cash in the distant future.

A report released in May by blockchain infrastructure platform Bison Trails found that around 80 percent of central banks were exploring using digital currencies, with CoinDesk reporting that 40 percent were already testing proof-of-concept programs.

London-based Fabric Ventures has closed a $130 million fund to invest in early stage blockchain companies. One of its supporters is the European Investment Fund, which provided $30 million, marking the first time a European Commission company had invested in a fund focused on digital assets, said CoinDesk.

Stock and cryptocurrency trading app Robinhood has received a $32 billion valuation with its initial public offering and was set to debut on the Nasdaq on Thursday.

In a press statement on Wednesday, Robinhood priced its offering at $38 per Class A common share. The price is at the lower end of the $38 to $42 share price range that the company had targeted, and it planned to sell 5.5 million shares targeting an increase of $1.89 billion.

The firm is trying to reshape its image and said it was working on a new feature that would help protect users from cryptocurrency price volatility, while hiring a former Google graduate to improve the overall product design, according to CoinDesk.


Arab celebrity message app Yela raises $2.2 million funding

Yela has secured over a hundred A-list celebrities who fans can connect with, including Amr Diab. (Supplied)
Yela has secured over a hundred A-list celebrities who fans can connect with, including Amr Diab. (Supplied)
Updated 30 July 2021

Arab celebrity message app Yela raises $2.2 million funding

Yela has secured over a hundred A-list celebrities who fans can connect with, including Amr Diab. (Supplied)
  • The interactions on the platform can range from direct text messages to video clips

JEDDAH: Yela, a platform allowing users to get personalised video messages from their favorite Arab celebrities, has secured $2.2 million in funding, it was announced on Thursday.

Set to launched in August, Yela secured funding from US and UK investors with offices in London, Cairo, and Dubai. Participating from Silicon Valley is Razmig Hoghavian, a board member of Rakuten and General Partner at Graph Ventures.

The application was founded by Alex Eid, who said in a statement: “It’s incredible to see the support that Yela has already received from all sides, investors, celebrity creators, and fans.”

The first round of funding was also led by US investors Justin Mateen, a co-founder of Tinder and the General Partner of JAM Fund, and Sean Rad, a general partner at RAD Fund and also a co-founder of Tinder.

Yela has secured over a hundred A-list celebrities who fans can connect with including Amr Diab, Haifa Wehbe, Youssra, Mohamed Henedy, and Ahmed AlSakka. The interactions on the platform can range from direct text messages to video clips, with prices starting from $100.

 

 


Saudi Arabia to use 4IR to transform energy sector, fight climate change

Economy and Planning Minister Faisal Al-Ibrahim (L), Saudi Energy Minister Prince Abdul Aziz bin Salman (C) and Finance Minister Mohammed Al-Jadaan at the 4IR forum. (Screenshots)
Economy and Planning Minister Faisal Al-Ibrahim (L), Saudi Energy Minister Prince Abdul Aziz bin Salman (C) and Finance Minister Mohammed Al-Jadaan at the 4IR forum. (Screenshots)
Updated 29 July 2021

Saudi Arabia to use 4IR to transform energy sector, fight climate change

Economy and Planning Minister Faisal Al-Ibrahim (L), Saudi Energy Minister Prince Abdul Aziz bin Salman (C) and Finance Minister Mohammed Al-Jadaan at the 4IR forum. (Screenshots)
  • Ministers laud the technology at forum for Fourth Industrial Revolution in Riyadh
  • 4IR is a way of describing the blurring of boundaries between the physical, digital, and biological worlds

DUBAI/RIYADH/JEDDAH: Saudi Arabia is aiming to use Fourth Industrial Revolution (4IR) technology to fundamentally transform the energy sector, enhance the security of its water and food resources, and fight climate change, senior ministers announced.

“Our vision is to transform the energy sector through the application of data and technology,” Saudi Energy Minister Prince Abdul Aziz bin Salman said during the 4IR forum in Riyadh on Thursday.

“Saudi Arabia has a rich resource of youthful innovators who can be entrusted with the task of seeing this transformation through to fulfillment. The synergy between youth and technological innovation will make Saudi Arabia a dynamo for the digital transformation of the energy sector.”

4IR is a fusion of advances in artificial intelligence, robotics, the Internet of Things (IoT), genetic engineering, quantum computing, and more. It is a way of describing the blurring of boundaries between the physical, digital, and biological worlds.

The application of 4IR technology in energy will enable the Kingdom to lead the way in the battle against climate change, the Saudi energy minister said. 

“Perhaps the most important area where technology and energy can combine to the benefit, not just of the Kingdom, but of all mankind, is in the search for cleaner energy,” Prince Abdul Aziz said. “Here, we can use the technology of the 4IR to accelerate the energy transition, and meet the goals for the reduction in greenhouse gas emissions.”

His view was echoed by Ahmed Al-Zahrani, assistant minister for energy, who highlighted the potential of 4IR technologies like IoT and Blockchain. 

“These will help our endeavors to improve efficiency and reduce emissions,” Al Zahrani said.

The Kingdom is known for its energy security as it has been endowed with huge energy resources, but when it comes to food and water security, the country is facing challenges. Adding 4IR applications can address these challenges, Saudi Minister of Environment, Water and Agriculture Abdul Rahman Al-Fadli told the conference. 

Al-Fadli also said 4IR applications such as the use of remote sensors, artificial intelligence, and robotics will help the farming sector in Saudi Arabia as the technologies will provide better data from the fields. He also mentioned that these applications will assist the Kingdom in its plan to plant billions of trees under its green initiative.

“The challenge we all face is to tackle the great issues of the world today, like post-pandemic economic recovery, energy reliability, and sustainability,” Prince Abdul Aziz said.

In other developments from the forum, Ahmed Al-Saadi, senior vice president for technical service at Saudi Aramco, said the oil company had developed its technology for many years, notably in monitoring conditions in oil reservoirs. He said Aramco had made great strides in technology and was among the “best in class” operators in the global energy peer group.

Mohammed Abunayyan, chairman of ACWA Power, the utility developer backed by Saudi Arabia’s Public Investment Fund, told the forum most of its operations were now digital and that essential maintenance was controlled and managed through digital functions.

Abunayyan also said the involvement of the private sector in the digitization of energy was crucial: “The private sector will always deliver better value than the public utility model.”

Jason Bordoff, Dean of the Columbia Climate School in New York, had a warning about the slow progress towards the Paris Agreement goal of reducing CO2 emissions.

“We are not on track to meet those goals,” he said. “We need emissions to decline faster.”

Melissa Lott, research director at Columbia’s energy policy center, said carbon capture, utilization, and storage — a big element in Saudi Arabia’s Circular Carbon Economy framework — was crucial to efforts in reducing emissions.


New center to lead Saudi role in ‘4th industrial revolution’, economic minister says

New center to lead Saudi role in ‘4th industrial revolution’, economic minister says
Updated 30 July 2021

New center to lead Saudi role in ‘4th industrial revolution’, economic minister says

New center to lead Saudi role in ‘4th industrial revolution’, economic minister says
  • The Saudi minister said the new center will contribute to global discussions on the use of 4IR technology, such as 5G and artificial intelligence

DUBAI: The Saudi Centre for the Fourth Industrial Revolution (4IR) will lead the Kingdom’s role in utilizing advanced technologies and their local and global implications, Minister of Economy and Planning Faisal bin Fadel Al-Ibrahim said.

The Saudi minister said the new center will contribute to global discussions on the use of 4IR technology, such as 5G and artificial intelligence, especially amid the COVID-19 pandemic that has introduced new challengers to countries.

“COVID-19 intensified the need for data and evidence-based iterative policymaking supported by technology-driven and innovation-based solutions,” he said at the first Saudi 4IR forum held in Riyadh.

The Kingdom has become a global role model in deploying digital technology at peak of the health crisis, Al-Ibrahim said, enumerating Saudi efforts to manage the pandemic.

The Kingdom is known for its energy security as it has been endowed with huge energy resources, but when it comes to food and water security, the country is facing challenges.
(Shutterstock)

Saudi Arabia ranks 4th in the world in 5G connectivity, he added, and a robust digital infrastructure helped the Kingdom overcome challenges in the education and finance sectors.

Over 850 thousand daily classes were executed for over 6 million students in 2020, and around 2.8 billion digital payment transactions were made.

“This demonstrates Saudi`s leadership in having the most modern digital platform and world class capabilities to design local and global solutions at the technological frontier,” the minister said.

A recent report by the United Nations Conference on Trade and Development said the technology market could reach the value of 3.2 trillion dollars in 2025, increasing by almost 10 times from 2018 figures.

Al-Ibrahim said the Saudi economy could benefit from this by capturing a slice of the industry over the next five years.

The Kingdom is already in a good position, he explained, saying it “has its work cut out for it to move up the Global Innovation Index rankings where we plan to be among the leading pack of our G20 peers.”

“We are passionate about the objectives and vision of the Center, and look forward to working closely with its team in bringing the public and private sectors as well as the science and technology community together,” he added.